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Finland’s Mehiläinen acquires Lithuania’s InMedica, signaling strong investor interest in Baltics healthcare

Mehiläinen, Finland’s largest for-profit healthcare group, backed by Luxembourg-based asset management firm CVC Capital Partners, is set to acquire InMedica Group, Lithuania’s largest private healthcare network, which operates 89 clinics. 

Pending regulatory approval, the transaction marks the largest healthcare investment to date in the Baltic region.

This acquisition makes Mehiläinen the largest private healthcare provider in the Baltics region. Since INVL Baltic Sea Growth Fund, the largest private equity fund in the Baltics, invested in it in 2019 InMedica has grown its revenues from €10 million to €150 million.

Nerijus Drobavičius, Partner at INVL Baltic Sea Growth Fund, speaking to HBI, called Mehiläinen’s acquisition of InMedica a “landmark deal” for investors and Lithuania’s healthcare sector.

“As a fund, we have fulfilled our mission — we have created the right conditions for a relatively small business to become a market leader and an integral part of the healthcare system. After evaluating potential investors, we believe that Mehiläinen is the best possible next owner for the InMedica Group, as it has exceptional resources, capabilities, and the corporate culture to support InMedica Group’s continued growth and development.”

Commenting on the timing of INVL’s divestment from InMedica, Drobavičius explained that they had achieved their investment goals.

“With (InMedica’s) current service offering, geographic coverage and strong management in place, it is now able to attract interest from international strategic and financial investors, which was not the case in the beginning. Finally, INVL has held its stake in InMedica for almost six years, which is considered to be a ‘normal’ holding period for private equity investments.”

Why is Mehiläinen interested in Lithuania?

Andreas Taalas, Mehiläinen Business Line Director for the Baltic region told HBI that Lithuania, the largest economy of the three Baltic countries (Estonia, Latvia, and Lithuania), offers a growing healthcare market and is strategically located near Mehiläinen’s other markets. 

Expanding into Lithuania, he said, felt like a natural step as part of the company’s growth and internationalisation strategy, following its success in Estonia and operations in Germany and Sweden.

Why InMedica?

Taalas further commented: 

“InMedica stands as the market leader in Lithuania. The company has a proven track record of several years of growth, led by its founder and entrepreneur Kęstutis Broniukaitis, who together with his management team has done outstanding work. InMedica Group’s service portfolio and business model align closely with Mehiläinen’s, offering a solid foundation for future collaboration.” 

INVL’s broader healthcare investment plans:

Drobavičius told us while INVL is sector-agnostic, the fund has seen a successful exit from the CEE-based pharmaceutical company Sanitas in 2011. 

“InMedica is our second example of a successful private equity contribution creating a strong market player for the sector. We remain present in the broader healthcare industry through other investments, namely (i) MBL, a leading contract manufacturer of medical mobility devices, e.g. wheelchairs, rollators, long term care beds and other rehabilitation equipment; and (ii) Eglės Sanatorija, the largest post-acute, recovery treatment and medical rehabilitation service provider in the Baltics”

“In our deal pipeline, we are actively looking at a number of potential healthcare transactions both within and outside of the Baltics, focusing on a number of different sub-segments, e.g. medical services, production, and specialised retail.”

What makes Baltics an attractive region for healthcare investments?

Private healthcare in Lithuania has grown significantly over the years. It complements the public system by offering shorter wait times, personalised care, and specialised services. The sector is appealing for investors, especially in niches like medical tourism and cosmetic surgery, due to affordable private insurance costs compared to Western Europe.

Drobavičius explained to HBI that healthcare in the Baltics is expanding faster than the overall economy, driven by its underdeveloped and fragmented nature compared to Western countries. For example, with Estonia’s healthcare system, which employs a public-centred funding but a hybrid delivery model, the new hospital strategy could create opportunities for private sector participation not only in terms of infrastructure development but also service delivery. Read more here.

“We expect this trend to continue as increases in disposable income typically result in higher spending on personal health. The private sector is an integral part of the healthcare sector and the state support remains strong, treating public and private providers largely equally.”

2025 could be the year healthcare M&A finally bounces back, globally

Ramesh Jassal, Partner — Healthcare, Corporate Finance at investment bank Heligan Group, told HBI in an interview that healthcare is emerging from the bottom of the cycle, with a market rebound expected in 2025. 

Hardik Madlani, Managing Director of Healthcare Investment Banking at Jefferies, echoed this, predicting 2025 could break records for healthcare and life sciences private equity deals. 

“Private equity is sitting on significant capital, and many companies are nearing exit. We’re already seeing increased transaction activity, and next year could be a breakout year.”

Drobavičius, commenting on 2025 opportunities for PE funds in the Baltic healthcare sector, noted that INVL Baltic Sea Growth Fund has nearly fully committed its capital, achieving over 26% Net Internal Rate of Return (Net IRR) by Q3 2024.

“We are in the process of raising a €250m successor fund (INVL Private Equity Fund II), with its first closing scheduled for Q1 2025. Our focus will be the Baltics and Poland as its core geographies, while also opportunistically considering projects in the rest of the EU.”

Click here to read more of HBI analysis of healthcare in the Baltic region. 

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